Kimberly Clark Corp (NYSE:KMB) saw its shares make headway, on agreeing to acquire Softex Indonesia for $1.2 billion in cash.
The Dallas-based company, whose flagship product is the Kleenex line of tissues, says the purchase is an all-cash transaction for approximately $1.2 billion from a group of shareholders including CVC Capital Partners Asia Pacific IV.
Indonesia is a large, growing market with attractive future prospects, and the acquisition immediately improves Kimberly-Clark’s currently limited position in the country to one with strong market share in key personal care categories across Southeast Asia’s largest economy.
The diaper market in the Asian country is currently estimated at $1.6 billion, the sixth largest in the world, with approximately five million annual births. Approximately 80% of Softex Indonesia sales come from diapers, and it currently holds the number two market share position with the Sweety® and Happy Nappy® brands while continuing to grow its market presence.
The remaining Softex Indonesia sales are mostly in the feminine care and adult care categories. In feminine care, the company holds the number three market share position with the Softex® brand. In adult care, it holds the number two market share position with the Confidence® brand.
Kimberly Clark CEO Mike Hsu comments, “This acquisition represents a compelling strategic fit and demonstrates our commitment to accelerate growth in developing and emerging markets. Moreover, adding Softex Indonesia and its brands to Kimberly-Clark will enhance our company’s underlying growth prospects and help us create even more long-term shareholder value.”
Shares climbed $1.31 mid-morning Friday to $153.56.